Is it customary to negotiate for bike prices at bike shops? I spoke with an owner of a bike shop and he commented that bike shops have a small mark-up on bikes. Is this true?

Yep, LBS's (short hand for local bike shops) have notoriously low profit margins.

Generally true. I'm surprised the small guys can even stay in business. That said, however, most of the shops do have a little room to play with, depending on the level of bike. If it is a lower end, entry-level bike, you should be happy with a free tune-up and a nice discount on some accessories. As you go up the ladder, though, I would expect some relief off msrp. And if you are okay with last year's model, you are definitely in the driver's seat.

You can negotiate service, repairs, adjustments, labor, and sometimes small things to throw in like tubes, bar tape, saddle bag ect..

NO!!!
Bike shops make most of their profit on accessories and service/repairs.
After you've been a regular customer for a while the shop owner may give you an occasional break on future purchases, but don't expect it all the time.

I do alot of business with my LBS, and when my son is looking to buy a whole bike from him, regardless of what the price tag says, I just ask him what he'll take for it. He usually give me a lower than posted price, but I don't push it from there.

Being willing to buy last year's model will get you the best deal. My wife and I picked up her bike that way. List price was $899, we got it for $590. Of course, it helped that it was the shop bike, so it had a year's worth of use on it, mostly beer runs & such. They'd even replaced the shifter on it recently, so it was in near-perfect condition. We weren't too worried about the few minor dings and scratches, because, as my wife said, they give her "street cred."

The markups are not small on bikes. They are actually typical for most durable-goods retail operations (except automobiles.) But the overall shop unit sales volume is not high in most cases, so the net (after-overhead) profits are small. And the business is highly seasonal, even with online vending.

It isn't much of a business for getting rich.

Hey, RonH. Love the avatar.

I wouldn't dream of bargaining with my favored LBS. With only one exception (pant clips) they are comfortably under any price I can find on the internet, and minor repairs that are quick and easy if you know what you're doing are often free.

Thanks for the information. I'm new to this.

Ah, BULL! EVERYTHING's negotiable. Customary? I guess that depends on where you're from.

I always negotiate for the price of a bike. If the shop wants the sale and can afford it, they'll come down. If they can't and I want the bike bad enough, I'll pay their asking price. That's just capitalism.

I never expect price breaks on anything. At my current shop (from whom I've never bought a bike because I move every couple of years), the owner randomly gives me discounts. I never ask, nor expect it. However, if I decide to go for a new bike while I'm here, we'll talk about the final sales price before any transaction.

Bottom line is do some research and make an offer. Make it reasonable and don't get torqued if he says no; remember, it's just business. If your budget intersects his required sales price, you have a bike and he has a customer.